Badger Meter Inc (NYSE:BMI) Beats Q3 2025 Earnings and Revenue Estimates

Badger Meter Inc (NYSE:BMI) reported third quarter 2025 financial results that surpassed analyst expectations, demonstrating continued momentum in the water technology sector. The company's performance was driven by strong demand for its digital water solutions and successful integration of recent acquisitions.

Quarterly Performance vs. Estimates

The company delivered solid top and bottom-line results for the quarter ended September 30, 2025, exceeding consensus estimates on both revenue and earnings per share.

• Revenue: $235.7 million actual versus $234.2 million estimated, representing a 13.1% year-over-year increase
• Earnings Per Share: $1.19 actual versus $1.15 estimated, marking a 10% improvement from the prior year's $1.08

The revenue beat, though modest, reflects the company's ability to consistently grow its top line in a stable utility market. The more significant earnings surprise suggests effective cost management and operational efficiency, particularly notable given ongoing tariff-related cost pressures.

Market Reaction and Price Action

The market responded positively to the earnings release, with shares showing strength in pre-market trading. This immediate reaction indicates investor approval of the company's ability to exceed expectations and maintain its growth trajectory. The stock's performance over recent weeks had been relatively flat, suggesting the positive earnings report provided a catalyst that was not already priced into the stock.

Operational Highlights and Management Commentary

The earnings release highlighted several key strengths in Badger Meter's business model and strategic execution.

• Utility water sales increased 14% year-over-year, or 8% excluding the contribution from the SmartCover acquisition
• Operating earnings grew 13% to $46.1 million, with operating margins expanding slightly to 19.6%
• Gross margin improved 50 basis points to 40.7%, benefiting from favorable sales mix and price increases
• Cash flow from operations remained robust at $51.3 million for the quarter

Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer, emphasized the company's "solid operating leverage" and successful integration of the SmartCover acquisition. He noted that "demand is strong for our industry-leading cellular AMI and BlueEdge smart water management solutions" and expressed confidence in the "secular drivers influencing digital water technology adoption."

Updated Guidance and Forward Outlook

Management provided updated forward-looking commentary that reflects optimism about the company's positioning and margin profile.

• The company raised its normalized gross margin range from 38-40% to 39-42%
• Management expressed conviction in an "average top-line growth rate of high-single digits" over the next five-year strategic planning horizon
• Strategic pricing actions and structural mix benefits are expected to continue offsetting tariff impacts

This improved margin guidance suggests confidence in the company's ability to maintain pricing power and benefit from the ongoing shift toward higher-margin digital solutions.

Comparison to Analyst Estimates

Looking ahead, analyst estimates for the fourth quarter of 2025 project revenue of $235.1 million and earnings per share of $1.16. The company's historical performance and raised margin guidance suggest it is well-positioned to meet or exceed these expectations, particularly given management's comments about typical fourth-quarter seasonality with fewer operating days.

For investors seeking more detailed analysis of future earnings potential and consensus estimates, additional information is available through the Badger Meter earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The author has no position in Badger Meter stock. Investors should conduct their own research and consult with a financial advisor before making investment decisions.